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      Saturday, November 19, 2011

      IT cost management

        For as long as I can remember, employee benefits plan sponsors have been talking about benefits of it cost management, it chargeback, and itil financial management. In the face of double-digit cost increases that have persisted over the last decade—fuelled by such factors as increased utilization, government offloading, the introduction of new, more costly medicines, changing demographics, etc.—the cost management imperative on the surface seems compelling. And the recent economic downturn should have only helped to crystallize the need to manage plan costs. Surely, benefits cost management must be the norm. In actual fact, benefits cost management is more myth than reality—at least as it relates to traditional cost-containment approaches through plan design and cost-sharing. It is pretty clear that there is not a lot of cost management being built into benefits plan design. This is not to suggest that no plan sponsor has made plan changes to address plan costs—many have. The point is rather that the response to the issue has been somewhat incremental, certainly within the context of benefits costs being a top priority for many organizations. And many plan sponsors still rely exclusively on a change of insurers to keep their costs in line. It has been a reasonably effective strategy—insurers have been remarkably consistent in their ability to lower plan sponsors’ cost in the never-ending battle to build market share by taking the business away from their competitors.

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